European car makers have won EU support for their request of cash assistance to help face the challenge of making greener cars during financial turmoil.

Car makers find EU support for loan deal

European car makers have won EU support for their request of 40 billion euros ($A79 billion) in aid to help face the challenge of making greener cars during financial turmoil and an economic downturn.

After talks at the European Commission, Christian Streiff, head of the European car makers' association ACEA, said the "fallout of the financial crisis has only increased the urgency" to help his sector through a period of reducing output.

"Caring about the European car industry means caring about millions of present and future jobs (and) clean and affordable cars," Verheugen said.

"Responding to (the car sector's plea) will help us to find the most appropriate answer and to turn the current crisis into an opportunity."

Approval of the 40 billion euros aid package in the form of soft loans lies in the hands of the 27 EU governments.

French President Nicolas Sarkozy already has said the car industry should have government help to weather the financial crisis.

The idea was criticised by the environmental organisation Greenpeace, which said the industry is "asking taxpayers to foot the bill for its irresponsibility and inaction.

Instead of responding to demands from the public for cleaner cars, carmakers want to continue to milk the taxpayer and are asking for more government subsidies."

EU car makers want something similar to the US government's $25 billion low-interest credit line for General Motors Corp., Ford Motor Co. and Chrysler LLC announced last month.

Car companies are looking for "a low-interest loans package" of 40 billion euros that "would help secure a sustainable market for current and newly developed fuel-efficient technologies," said Streiff.

The loans would come from the EU's European Investment Bank which provides lending to generate economic growth in regions across the region.

Streiff also urged governments to tempt Europeans to switch to greener cars.

More than a third of cars in western Europe are more than eight years old, according to industry data.

Switching to newer models would cut EU's overall greenhouse gas emissions by nearly five per cent, they said.

New EU rules will likely force car makers to slash emissions from new cars over the next 10 years.

The car industry complains that this will force it to spend heavily on new technology and risk jobs at a time when sales are falling.